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Intrinsic to pay after couple’s pension transfer charge complaint

Intrinsic Financial Planning has been told to compensate two clients who were advised to transfer their pensions into plans that made them worse off.

The Financial Ombudsman Service handled two complaints from Mr H and Mrs H who said they were not aware of the charges that were applied to their pensions on transfer.

In early 2016 Mr and Mrs H met with their new adviser, following the retirement of their previous one, when they agreed to discuss their finances.

Mr H had three personal pensions with a value of around £68,500 and a recommendation was made to transfer into a new plan with a 5 per cent initial and 1 per cent ongoing adviser charge.

Mrs H had two paid up pensions with a value of around £40,000 and a recommendation was made to transfer into a new plan with a 5 per cent initial and 1 per cent ongoing adviser charge.

Both said they did not receive suitability reports and complained about the transfers when given copies of them.

They argued these reports were the first time they were aware of the initial charge and would not have gone ahead if they had been aware at the time of the advice.

Intrinsic did not uphold either complaint and said both Mr H and Mrs H had been made aware of the charge through a variety of documents.

The adjudicators investigated and felt the complaints should be upheld as the charges for the new plans were higher and contradicted Intrinsic’s reasoning that the transfer would give both lower fees.

Intrinsic disagreed, pointed to the suitability reports which explained the reasons for the transfers and explained the difference in charges between the plans and set out the adviser’s reasons for recommending the transfers.

The cases were referred to ombudsman Roy Milne who ruled in favour of Mr and Mrs H as he could see no good reason for the extra product costs incurred upon transfer.

Milne says Intrinsic should pay both £100 for the disruption caused to their retirement planning and compensation based on the benchmark he has selected.

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19th November 20182:58 pm

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

Higher product charges, an initial adviser charge of 5% and 1% p.a. ongoing? The benefits offered by the new plans would have to have been pretty flipping fantastic to overcome all that. What did the Critical Growth Rate illustrations indicate?

A J Bell Management should compensate Mr S for their Corporate intermedling, their malpractice and criminal activities by Chairman,CEO and employees to destroy Mr S pension fund, built up from a Scottish Widows Final Salary Scheme transfer.

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